Americans spent upward of $100 billion on lottery tickets in 2021, making it the most popular form of gambling. Despite being called addictive and a waste of money, lotteries are popular among many people and raise valuable revenue for state governments. But is the price of this reliance on chance fair? And is that revenue really worth the state’s costs, including those borne by lower-income groups?
Across the country, state officials and private promoters have used lotteries to raise money for everything from bridges to colleges. Benjamin Franklin organized a lottery in 1776 to fund a battery of guns to defend Philadelphia against the British, and public lotteries were common in the American colonies.
After New Hampshire launched the modern era of state lotteries in 1964, most states followed suit. And, remarkably, the introduction of lotteries in each state follows a similar pattern: The state legislates a monopoly for itself; establishes a public agency to run the lottery (rather than licensing a private firm for a cut of the profits); begins operations with a modest number of relatively simple games; and, as demand for additional revenues rises, progressively expands the number and complexity of available games.
This expansion, of course, is a classic example of public policy being made piecemeal and incrementally. Often, the initial decisions are not revisited once they are made and state lottery officials inherit policies that can have significant ramifications. Those ramifications can include compulsive gamblers, regressive effects on poorer populations, and other social issues.